The present invention relates to the field of creating, managing, evaluating, and optimizing business partnerships and alliances. Included in the present invention is that it relates to the field of creating measurements that reflect industry standards for the field of invention and that it also relates to the field of creating knowledge and business intelligence data and information in the field. It includes partnerships and alliances which operate in a vendor/vendee capacity by assigning weighted and comparative metrics to the following criteria: Partner Selection, Partner Agreement, and Partner Management which, in combination, track a Partner Value.
It includes Customer Support Relationships (partnerships) between companies and customers and it includes Sales Force SFA Relationships (partnerships) between companies and customers. It includes additional application in pharmaceuticals, Biotechs, Manufacturing, Financial Services, and other industries where there are partnerships between two or more separate business entities.
The convergence of three business issues relating to alliances, sales channels and business partnerships creation and management has led to the substantial need for the development of a new system and method to create, manage, evaluate, optimize, create business partnership standards and create re-useable knowledge and business intelligence as it applies to the alliances, channels and business partnerships. These business issues are the need to improve alliance, channel and business partnership effectiveness in order to achieve desired results; the need to quickly capture knowledge relating to best practices and the impact of program, process, product and personnel changes as baby boomers will soon retire and knowledgeable staff continue to transition to other companies and; the need to create business intelligence and knowledge which can only be accurate and predictable if information on all partnership aspects are captured.
Since the year 2000 to present, as the economy slowly comes out of the recession, companies are continuing to seek ways to increase efficiency and productivity while continuing to drive out costs. This approach has been very effective in assisting companies in maintaining profitability. Employees are more productive. Expenses are tightly controlled. There are very few places left to create efficiency on many companies' income statements and balance sheets. Doing more with less does have benefits to the bottom line. However, too much efficiency greatly impacts employee effectiveness. Therefore, productivity gains may not be as great as companies believe them to be.
As baby boomers start to retire in the next five years, as employees change jobs and go to work for other companies, and as the economy becomes more global, it will become more and more critical to capture the personal knowledge and experience held by these employees. By understanding the Strategy Evolution and Impact of Demand Generation and Customer Support Optimization on Business Intelligence, Corporate Value and Corporate Strategy, companies can greatly improve effectiveness and their ability to capture significant knowledge that will result in increased revenues and further decreased costs.
Over the past two decades, there has been an evolution in customer support and business process improvement. It started with Information Technology Service Management (ITSM), also called Help Desk, to support internal computer users. Initially, for those of us that remember, this was to support internal customers using mainframe systems that were so large that they could fill a room. As the acceptance of personal computers (PCs) and personal computer (PC) servers increased and demand for internal customer support increased, pencils, pens, paper and spreadsheets became too inefficient to cost effectively support these operations. Companies had two choices. They could build their own applications at great expense or look to the outside and purchase a software solution that would cost effectively, automate their helpdesk processes. This automation greatly increased efficiency and, as the helpdesk market matured, drove out costs. As time has passed, business process management, Six Sigma and ITIL have been applied to these support processes in order to further increase support efficiency and customer satisfaction.
Companies measure process efficiency to determine additional areas and processes that can be improved in order to increase return on investments (ROIs). Service level agreements have become the norm. Processes have been created to provide self service to company internal customers in order to increase efficiency and decrease support costs. Solution knowledge bases have been created to further decrease costs and improve efficiency and customer satisfaction.
Over the last decade, there has been an evolution in the automation of customer support processes. Customer Relationship Management (CRM) has steadily grown as a mission critical application in almost all companies. Customer Service, as it was once called, was a labor intensive, inefficient and costly business function. As competition in almost all markets has increased, cost management and customer satisfaction have become critical areas to manage, the need to automate support processes became critical to a company's success. Companies again had two choices. Companies could build an in-house solution or they could purchase a software solution from the outside. This automation greatly increased efficiency and, as the customer support market matured, drove out costs. As time has passed, business process management and Six Sigma have been applied to these support processes in order to further increase support efficiency and customer satisfaction. Companies measure process efficiency to determine additional areas and processes that can be improved in order to increase ROIs. Quantitative service level agreements have become the norm. Processes have been created to provide self service to customers in order to increase efficiency and decrease support costs. Solution knowledge bases have been created to further decrease costs and improve efficiency and customer satisfaction.
As the market moves forward and the need to further increase customer satisfaction, business intelligence is becoming the next “Killer App” for customer support. Not only are companies dedicating resources to product research, but they are also gathering human capital quality data to gain further insight into the customer in order to improve numerous areas within a company. For example, instead of just asking a respondent “do you like the red product?”, companies are starting to ask and electronically capture why the respondent likes or does not like the red product to gain further insight. Some companies are even asking respondents what would the companies need to do to the product for the respondents to buy it even if it was red. At some point, there will be integration between business intelligence and predictive modeling. As more data is captured regarding how qualitative information impacts quantitative results, accurate predictions, not only regarding customer support, will be developed. This will result in great progress towards company optimization.
Sales Force Automation has become a standard application in most companies. There has been a recognized need to assist the sales warriors in increasing their efficiency. Salespeople seem to forget about their paperwork and concentrate on selling. Stacks of paper are piled on their desks. If someone were to walk by, they would know that the desk was that of a salesperson. Sometimes, it seems like the salesperson with the most stacks of paper is the most successful. In the last decade, there has been a significant increase in the sale of Sales Force Automation software.
This is for a few reasons. The first is to gain more efficiency in selling a company's product. It has been felt that if a salesperson is better organized, the salesperson will have more time to sell. The tool houses quantitative information regarding accounts, contacts, sales quotes, forecasts, calendars and other vital account information. It tracks the quantitative aspects of the relationship. Salespeople are often the highest paid individuals in a company. Their ability to generate demand and revenue is critical to the success of the company. Their contacts are valuable assets. If a salesperson should leave and their account information has not been captured, the company must recreate those contacts and relationships at great expense and time. SFA tools also provide insight into how the salesperson spends his or her time. This can be used to capture knowledge on sales best practices and to identify areas where the salesperson can improve. As competition in almost all markets has increased, sales efficiency, cost control and account knowledge have become critical areas to manage, the need to automate sales and sales support processes has became critical to a company's success. A company's measure of a salesperson's success is by performance. They have also added the salesperson's proficient and repetitive use of the company's SFA tool.
As companies apply business process management and Six Sigma to its sales function, sales processes and knowledge capture can be improved. If a company's ability to increase knowledge improves, the company can then begin to apply business intelligence to its sales model which in turn will lead to a greater competitive advantage and ability to consistently increase revenue even if a salesperson should leave. SFA tools can be integrated with CRM tools to provide even greater knowledge regarding customers. The combination of SFA tools, CRM tools and then adding the capture of human capital quality data will lead to even greater business intelligence and a company's ability to reduce costs, accurately predict revenue and further improve a company's overall performance, and, ROI and EPS.
So what does all this previous history have to do with increasing the Partner Value of business partnerships and alliances through creating, managing evaluating, optimizing, creating industry standards and creating knowledge and business intelligence? The creation and management of alliance and business partnerships is one of the last bastions of business that has a significant need to have its processes automated, managed, and optimized. As the cost of direct sales organization increases, the size of the workforce pool decrease and the baby boomers retire, alliance and business partnerships will become more and more critical to a company's success. As efficiencies have increased in the areas of Helpdesk, CRM, and SFA, costs have been reduced and productivity has increased. Most alliance, channel, and business partnership processes are not automated. Some companies use CRM software, some use SFA software, some use paper, pencils, and spreadsheets and others use PRM software. The most efficient are, of course, the automated solutions. Current trend and marketing information indicate that PRM is the next support growth market. PRM vendors market their solutions with strong ROI benefits in the areas of increased efficiency and decreased costs. PRM solutions, unlike CRM and SFA solutions have been designed specifically to automate the creation and management of alliances, channels, and business partnerships.
How have vendors automated partnering activities and what is left to be done? First, vendors utilized the web to provide partners with fast and easy access to commonly needed information as the web evolved. Partner intranets were also deployed to provide the vendor's employees relevant partner information. Typical information posted on these sites would be company profiles, product and service information, key contacts, sales presentations and white papers. Vendors continued to increase the productivity gains and cost reductions through automation by implementing systems that allowed partners to configure and order products online. Partners have also been provided with online support, web based training and certification testing.
PRM solutions were introduced in the last five to six years. Since their introduction, they have been used to further automate alliance, channel, and business partnership processes. Vendors are starting to organize and consolidate their partners contact, pipe line and contract information as well as, marketing information. They have been able to automate lead distribution and campaign management processes. These systems have increased efficiency in managing partner information and processes, but have little impact on improving partner effectiveness.
Vendors have been using legacy systems to track performance of their resellers, distributors and their own reseller/distributor account managers. Common practice with SIs and ISVs is to assign a percentage of the revenue based on the partner's level of contribution in developing new sales or participation in closing an existing sale with the vendor's end user salesperson. This is a manual process and the assignment of sales credit is arbitrary which can often cast doubt on the creditability of performance data.
Vendors use PRM and other tools to gather partner feedback on vendor performance, marketing issues, and products. Most vendors use surveys as the primary method. This method can be compared to that of gathering customer data as it applies to feedback using CRM tools. Vendors don't ask their partners the why and how questions as part of the feedback process. Results from the partner surveys are not compared to the responses of what the vendor may answer to the same set of questions. Human capital quality data from partners is not captured.
Partners are not unlike end customers. They control what is sold and to whom. As the workforce shrinks, baby boomers retire and employees change companies, the partners' opinions will become more important. Surveys are most often conducted once a year. The survey results are seldom compiled to show year over year comparisons with the exception of the quantitative data. Knowledge is not created. The evolving strategy has stopped here.
How can the strategy continue? The same way that customer relationship management has, but with additional improvement. Business intelligence and predictive modeling be applied to business partnerships, channels and alliances.
The capture of all reusable knowledge regarding all aspects of partnership creation, management and performance will provide vendors with the ability to improve effectiveness, optimize results, and substantially decrease costs in numerous areas through analysis of historical data, current market trends and human capital qualitative data. Business process management principles will be applied to weak areas of partnership programs to improve processes. Information will be continuously captured so that partnerships can be optimized. Once a partnership or many partnerships are nearly optimized the data can be used to create business intelligence and enable the use of predictive modeling.
What does the future hold? CRM, SFA, and PRM will be used to create knowledge. Initially, this will be done separately. Business process management solutions will be used to improve processes along the way. All of the functional areas will include qualitative and quantitative feedback loops to enable continuous feedback and create knowledge. Today they do not. The new system and method can allow data to be analyzed in CRM and SFA as it is for partnerships. Current market trends and the knowledge that is captured over time will be combined with research and feedback and be used as business intelligence. Finally, all of the components of CRM, SFA, and PRM will be combined so that predictive modeling tools that use all available quantitative data, qualitative data and current information will accurately predict revenue opportunities, revenues that will be generated, areas where costs can be decreased, processes that can be improved and there root cause problems across cross-functional areas, and, what can be done to continuously optimize company value. The new system or method can be used as the core component of these combined processes so that a single Partner Value—that can now be called Demand Value, can be calculated.
It will be critical for companies to capture useable knowledge that considers all variables that can both aid and impact success. These variables include both quantitative and qualitative variables. A strong effectiveness strategy based on both of these variable sets may become the most important aspect of strong efficiency strategy.
Companies are faced with the ongoing task of integrating numerous disparate systems in order to improve efficiency. In almost every facet of a business, there are cross-functional dependencies that can impact results. It has been difficult to improve a department or function's processes much less the cross-functional processes that the department does not own or control and yet, depends on. Business process management tools are aiding in the fight. As companies are improving their department processes and some cross-functional processes, they seek to add the creation of business intelligence as the next step.
However, not seen in the prior art is a comprehensive approach for the creation, management, evaluation, optimization, creation of industry standards, and, creation of knowledge and business intelligence through a closed system and method that includes a core system and method as its foundation for calculating a single Partner Value that represents an algorithm of all inputs. There has been no method wherein the continuous generation of partner value has been evaluated.
If a company uses channels and alliances to sell its products, those channels and alliances should have the same expertise as the company's direct sales organization. It should be transparent to the customer, whether the selling organization is the company's direct sales organization or one of its partners. As a company creates value in its partners, it will win more sales and accordingly generate more revenues because it will increase its effective coverage in the marketplace.
Most companies use a standard channel and alliance model in the selection, negotiation and management of its channel and alliance partners, as shown in FIG. 1. Most companies spend comparatively little time selecting and coming to agreement with its partners. They choose to spend more of their initiatives in channel and alliance management, i.e., managing the relationship. Managing the relationship generally has meant driving revenue thought the channel.
Back in the early 1990s, partners would ask to sign up to resell a product and, if they had the financial and market coverage ability, they were generally signed on as partners.
As the markets that were called on became saturated with a company's product or its competitor's product, software and hardware margins have shrunk, commissions to the direct sales force decreased and all sales became competitive. A company's direct sales force, including its management, have often tried to take a large percentage of all hardware and software opportunities directly to the company and bypassed the partner sales organization in order to increase margins and keep the direct sales organization intact. This has been done because of the greater expertise of the direct sales organization. Channel and alliance partnerships are becoming partnerships in name only.
Partner selection has generally been comprised of quantitative data as to the size of the organization, geographic reach, and ability to pay for sold products. Little time is spent on qualitative data such as management philosophy, company strategy, and hidden agendas. When a company enters into a partnership, both companies should know as much about and agree upon the qualitative data as they do about the quantitative data in order such as management philosophy, company strategy, and hidden agendas. When a company enters into a partnership, both companies should know as much about and agree upon the qualitative data as they do about the quantitative data in order to generate partner value.
Partner agreements most often reflect the terms and conditions of the agreement between the companies and nothing more. As stated above, in a true value generating partnership, it should be transparent to the customer whether he or she is working with a direct sales organization or a channel or alliance organization. In order to generate value, an agreement needs to be more than just terms and conditions. It must provide for the tools required to generate value and thus revenue and also for the accountability of the partnership.
Partner management is the interfacing with the channel and alliance partner. After a partner agreement has been signed, partner management has meant the tracking of a partner's activities that will lead to sales. It includes such items as sales forecasting, lead follow up, and number of trained product consultants. It tracks the concerns of the company, namely, sales revenue. In order to generate partner value, which will lead to the generation of revenue, companies need to effectively manage the relationship.
What is missing today in most channel and alliance partnerships is a lack of improving the relationship and a lack of improving the relationship using a repeatable system and method. If a customer values the relationship with its vendor, that customer will continually buy from that vendor. In the same way, if a partner sees that continuously improving value in a channel or alliance relationship, that partner will strive to generate revenues and improve the relationship.
Companies today are moving towards improving their channel and alliance relationships. They are creating metrics to track channel and alliance partner satisfaction. Typically, surveys are used to track some areas of the partner satisfaction. They most often ask questions about how satisfied the partner is regarding the partner's relationship with the company as it relates to the tools and information that the partner needs to generate revenue.
Partner management is the primary way to improve the partnership relationship. The key to increasing partner value is to capture both quantitative and qualitative metrics and then continuously improve the partner selection and partner agreement processes as well as the partner management processes. It has been identified that there are numerous relationships between the components that make up selection, agreement, and management. As these sums of these three components of the partner life cycle are improved, partnership value increases and thus, the expectations of the parties to the relationship will continue to be met on a long term basis. This will lead to meeting or surpassing the expectations of the partnership. The most often used standard approach to partner management does not address the continuous improvement of the partnership.
Further, when the system and method of calculating a Partner Value is used as it can apply to relationships with employees, partners, customers and sales people, and, when it also includes weighted values for outside inputs such as market research, customer feedback, and product research, in other words, adding CRM, SFA, and research together with PRM and the new system and method, and, then this Partner Value is calculated, all areas that need to be improved in relationships are identified and all of a companies potential product demand can be calculated. The new system and method is different from all predictive modeling and partnering tools, technologies and systems and methods, because it also includes the unseen, qualitative variables of behavior and culture as they impact need for demand and delivery.
So, it can be concluded that the new system and method allows companies to improve the performance of partnerships and allows them to predict future performance. In addition, when the new system and method is applied to company support and customer relationships and company sales and customer/prospect relationships, and when it includes weighted research variables, total company demand can be predicted. It is because of the similarity of process that the Demand Value can be calculated. In CRM, there is customer selection, customer agreement and customer management. In SFA, there is customer selection, customer agreement and customer management. These processes are very similar to partner selection, partner agreement and partner management as far as their ability that when weighted and combined, can calculate a very accurate demand value.
In reviewing the prior art regarding published and issued patents, there are a number of patents that are somewhat related to the area of business relationship analysis in a traditional and commonly understood sense. For example, U.S. patent application Ser. No. 10/379,188 filed by A. DiMarco discloses the use of a talent management system that helps organizations attract, develop and retain critical talent through computer aided visualization and analysis of various criteria, including a career view, a visual resume, an autobiography, self assessment, knowledge data, project experiences, etc., which makes it easier for potential employers to assemble and analyze desired criteria regarding potential employees. U.S. patent Ser. No. 10/034,820 filed by D. Weeks uses a variety of objects placed upon a table and manipulated by the user to characterize and reveal certain personality traits which can then be used to categorize which types of career roles are most suited to the individual.
Further, U.S. patent Ser. No. 10/094,034 filed by C. Farnes, et al. discloses a method for assessing performance of a customer experience of an organization. Only a customer survey is conducted, and this is not optimized with a business organization survey. However, this method is only directed for determining a model and evaluation of core competency and it is not directed to graphing or developing a means for optimizing the relationship between business partners. Another interesting patent disclosure relating to this area is disclosed in U.S. patent application Ser. No. 10/062,688 filed by M. Cohen, et al., which discloses a computer-implemented method and system for assessing performance related data from a set of performers, but it does not analyze a business relationship from the view of both a vendor and vendee. U.S. patent application Ser. No. 10/028,309 filed by Holliday, et al. discloses a system and process for evaluating a business entity's success in developing new business, but does not further analyze other aspects of business relationships.
Another business system related disclosure found in the prior art is U.S. Pat. No. 6,556,974 issued to D'Alessandro which discloses a method for evaluating a current business relationship, but this is only by taking the surveys of employees and other persons to be evaluated in the survey which relate to various aspects of the business operations. Again, it does not evaluate or optimize a business partner relationship.
Still a further interesting patent disclosed in this area is U.S. patent application Ser. No. 10/279,159 filed by P. Morrel-Sammuels which related to a method of providing employee assessment services including negotiating with an employer to administer surveys to employees and obtaining performance metrics relating to the employer's business performance. The survey is administered over the Internet. Similarly, U.S. Pat. Nos. 5,795 and 6,007,340 issued to P. Morrell-Sammuels discloses an assessment tool which presents a variety of statements to an individual, and the individual is requested to analyze the statements and provide a response for the purpose of determining the leadership capabilities of the individual. Other interesting patents in the prior art are U.S. Pat. No. 6,119,097 issued to D. Iberra which discusses a system and method for quantification of human performance factors, and U.S. Pat. No. 4,627,818 issued to VonFellenberg which discloses a system for psychological testing of individuals which may assess the empathy, willingness to learn and sociability, as well as aggressiveness, selfishness, etc. can be determined. However, it should be noted that none of these systems disclosed relate to the creation, evaluation and optimization of business partnerships.
Thus, nowhere in the prior is seen a system or method for creating, managing, evaluating, optimizing, creating industry standards and creating knowledge and business intelligence of a business partner relationship based upon both quantitative and qualitative criteria surveyed by both parties to the relationship.